DLP solutions are honestly a joke. 99% of the case they only cost you a fortune and prevent nothing. DLP is literally a corporate religion.
What you mentioned also makes sense if you are windows shop running AD. If you are not, setting it up to lock 1 workstation is insane.
Also, the moment the data gets put on the workstation you failed. Blocking USB is still a good idea, but does very little (network exfiltration is trivial, including with DLP solutions). So the idea to use remotely a machine is a decent control, and all efforts and resources should be put in place to prevent data leaving that machine. Obviously even this is imperfect, because if I can see the data on my screen I can take a picture and OCR it. So the effort needs to go in ensuring the data is accessed on a need basis.
I like the idea of canaries in documents, I think is a good point but obviously it only applies to certain types of data. Still a good idea.
Looking at OP, they seem a small shop, with a limited budget. Seriously the best recommendation I think is to use some kind of remote storage for data (works as long as the employee complies) and to make sure the access control is done in a decent way (reducing the blast of employee behaving maliciously). Anything else is probably out of reach for a small company without a security department.
Maybe I sounded too harsh, that’s just because in this post I have seen all kinds of comments who completely missed the point (IMHO) and suggested super complicated technical implementations that show how disconnected some people can be from real technical operations, despite the good tech skills.